The Bank of Japan today raised its target interest rate to 0,75%.
Friday, December 19, 2025 The Bank of Japan today confirmed raising its target for short-term interest rates to 0,75%.This marks another step in the gradual withdrawal of stimulus that has characterized the Japanese economy for years. The monetary authority reported which will now manage operations to keep the overnight rate around this new level, signaling that it remains confident that wage and price dynamics can support inflation closer to the target.
The change also came with adjustments to rates applied to the bank's own instruments. The rate for the complementary deposit facility was set at 0,75%, while the basic loan rate for the complementary lending facility was fixed at 1,0%. According to the statement, both the new guideline and these rates will take effect from December 22, 2025.
In the cryptocurrency market, the Bitcoin was trading today at US$86.900,44, up 1%. At the time of publication, investors were assessing the potential effects of Japan's new interest rate level on global risk appetite and currency movements.
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The adjustment expands the shift led by Governor Kazuo Ueda, who seeks to reduce reliance on extraordinary measures adopted during the period of low inflation and weak growth. Although the level of Japanese interest rates is still modest when compared to global standards, the move has a strong symbolic impact: it puts the rate back at levels associated with the 1990s, a period that the market often uses as a historical benchmark to assess changes in the cost of money in the country.
In addition to the short-term target, the Bank of Japan also updated operational parameters of the system. In practice, this usually alters the cost of carrying funds for financial institutions and helps to "anchor" the new interest rate level in the day-to-day operations of the money market. The bank indicated that the changes will take effect from the beginning of next week.
The backdrop to the decision is the understanding that Japan is experiencing a more consistent cycle of wage adjustments, with companies increasing pay and passing on some of the costs to prices. This environment reinforces the perception that inflation may remain around 2% for longer, reducing the risk of a return to the prolonged disinflationary pressure scenario that marked previous decades.
With the rate hike already implemented, investors should now focus their attention on the tone of the central bank's next signals. The pace of further adjustments could directly influence the behavior of the yen and the global appetite for operations that use the Japanese currency as a cheaper source of financing. Changes in this mechanism usually reverberate in international assets and, in times of greater risk aversion, can generate adjustments in markets around the world.
